Knowledge Center

Navigating Today’s Hardening Property Market

Two recent reports from AM Best and Fitch Ratings confirm the strength of the Excess & Surplus Lines (E&S) market. AM Best reported that the E&S market nearly doubled its pace of premium growth in 2018 over 2017 while Fitch confirmed the market’s continued strength in the first half of 2019 with premium growth of 15%, a rate nearly double the overall Property & Casualty (P&C) market’s growth rate. The growth in the E&S market is in part due to the hardening market including in the commercial property insurance sector.

In fact, Fitch anticipates that further premium rate hardening and movement of underwriting exposures toward non-admitted markets will support above-average E&S market premium growth in the near term. In addition, some larger players have limited their appetite, restricted coverage terms, or retrenched/restricted capacity deployment on certain risks due to severe catastrophe losses (i.e., Hurricane Irma), which is also driving more business to E&S carriers.

It’s important to note that this market cycle, which is now seeing higher rates, is not like previous hard market cycles (1986 or 2002-2003, 2005-2006) in which premiums doubled for some insureds and soared even higher for others. Yet we are experiencing a price correction, tighter underwriting guidelines and increased risk selection on the part of carriers in order to protect their bottom lines. There are premium or deductible multiples occurring but those typically involve the following types of businesses: Multi-family, Hospitality (CAT-driven), any hail-exposed risk, Recyclers/Foundries/Smelting ops, or loss-affected business.

Additionally, carriers are increasingly more discerning with regard to their partners, looking to wholesalers and MGUs that specialize in certain niche areas for underwriting profitability. Insurers want better business from their distribution system and both carriers and retailers are looking for improved operating processes to facilitate the placement of business – again, key areas that distinguish wholesalers and MGUs in the market.

RPS, as a national wholesaler and specialty insurance distributor, brings value to both insurers and our agent and broker partners. We’re here to help you navigate this changing market and find a home for your risks. RPS offers innovation and creativity in the exclusive programs we have developed and the platforms we’ve built to facilitate the insurance quote-bind-issue process. In fact, RPS has invested a great deal of resources to eliminate the headaches agents and brokers often experience with insurance placement.

We also bring unprecedented knowledge and expertise in specialized niches and products as well as expansive market access (over 200+ markets) to secure coverage in today’s P&C market. We’re renowned for placing complicated and unique risks – even for the most challenging clients. We get things handled so our agents can move on to their next client.

Let's Get in Touch

Please feel free to get in touch with us any time regarding our products and services. We love to receive feedback from our customers.